A Notice to Cure Default serves as your lender’s formal warning that you have violated your loan terms, commonly by missing one or more payments. Instead of immediately pursuing foreclosure or repossession, the lender gives you a chance to “cure” the default—meaning to fix the problem within a set timeframe, often between 15 and 30 days.
The notice typically includes:
- A clear description of the default (e.g., missed mortgage or loan payments, failure to maintain required insurance).
- Instructions on how to cure the default (usually by paying the overdue amount plus any fees).
- A cure period deadline specifying how long you have to comply.
- A warning about what will happen if the default isn’t cured, such as acceleration of the loan or foreclosure proceedings.
Receiving this notice does not mean foreclosure or repossession has begun; rather, it represents a legal requirement and your opportunity to bring your loan current. Ignoring the notice risks losing this chance and triggers more serious actions.
For example, if you miss your mortgage payments, your lender might send a Notice to Cure Default demanding payment within 30 days or they will start the foreclosure process. Similarly, a lender might send one if you fail to maintain insurance on a vehicle secured by an auto loan.
If you receive such a notice, take these steps:
- Read the notice carefully to understand the exact issues.
- Contact your lender immediately—even if you cannot pay the full amount—to discuss options such as payment plans or loan modification.
- Pay the amount due if possible and get confirmation of payment.
- Keep detailed records of all communication and correspondence for your protection.
Many states and loan agreements include a legal “right to cure,” meaning lenders must notify you and give you this opportunity before advancing to formal collections or foreclosure. Learn more about your rights in our article on Right to Cure Default.
Understanding this notice can help you avoid costly consequences like foreclosure or repossession. Acting promptly and communicating with your lender increases your chances of resolving the default and maintaining your financial standing.
For further information, visit the Consumer Financial Protection Bureau’s resources on handling mortgage defaults.
